Proposed Rule: FSP Revisions to Bonding Requirements for Violating Retail and Wholesale Food Concerns

This action proposes to revise the current bonding requirements imposed against participating retailers and wholesalers who have violated the Food Stamp Program rules and regulations.

Currently, all violating retailers and wholesalers that are disqualified for a specified period of time or have a civil money penalty imposed in lieu of a disqualification for a specified period of time are required to submit a valid collateral bond usually on an annual basis if they wish to continue to participate in the Food Stamp Program.

Over the years, securing a collateral bond has become increasingly more difficult for retailers and wholesalers to obtain. Thus, the intent of this proposed rule is to revise the current requirement in order to help alleviate the financial burden to those retailers and wholesalers who are required to submit such a bond and also to reduce the recordkeeping burden with respect to the FNS field offices which have to keep track of the expirations and renewals of these bonds.

This proposed rule would also place in the Food Stamp Program regulations the longstanding policy FNS has adopted to accept irrevocable letters of credit in lieu of collateral bonds. Lastly, this rule would establish a specified period of time for retailers and wholesalers to be removed from the program for accepting food stamp benefits in payment for eligible food on credit, a violation of the Food Stamp Program regulations.